Wireless Providers Behaving Badly

Recently you may have seen allegations that a major wireless company was engaged in a billing scheme we in the industry refer to as “cramming.” Let’s talk about what cramming is first, then how ARG can help make sure it never happens to you. Cramming is a derivative another piece of telecom jargon – “slamming.” Slamming is the unauthorized switching of phone service to another provider, usually at much higher rates that the subscriber had been paying to their selected provider.

The FCC came down hard on telecom companies for slamming. Rigorous marketing guidelines where established that have been very effective in limiting slamming. With the slamming opportunity all but eliminated, the easy-buck artists had to come up with another plan.

Leveraging their knowledge that customers do not regularly check their telecom invoices – they know this because slamming can easily be detected by a regular review of your invoice – the easy-buck people found another way to insert charges on an otherwise valid telecom bill. They subscribed customers to information services that carried a monthly fee ranging from $3 to $30.

How can someone just change your phone service or add a charge to your local phone bill? It is not that hard. There are a number of ways easy-buck marketers get your companies implicit authorization. One of the most common is to send your Accounts Payable department a check for some small amount – say $3.67. The well-meaning Accounts Payable team receives the check. They have no idea what to do with it, so they just send it into the bank as a deposit and record it under Miscellaneous Receipts. After all, $3.67 is not worth their time to investigate – that is what the easy-buck marketer is counting on!

On the back of that check is some micro-print stating that if the payee accepts the check, the marketer is authorized to subscribe them to an information service to be billed on their local telecommunications bill.

Viola! You are now a cramming victim.

Another version in the wireless telecom space are text message subscriptions for horoscopes, jokes of the day, investment tips, etc. These subscriptions are frequently unwanted or billed at a rate unexpected by the wireless subscriber.

Back to the recent news…a carrier (we are not using their name because they have only been accused, not convicted) been accused not of cramming themselves, but of allowing it to occur when they should have known better and tried to stop it. The carriers that bill the cramming charges typically keep a significant percentage as a billing and collections fee. This fee creates an incentive for carriers to allow cramming to go on. The alleged profits were profits where in the hundreds of millions. That would put the actually cramming fees in the billions.

So, how can you ensure your wireless bills are not laden with cramming charges buried deep within your individual user’s billing detail? ARG’s wireless manages services provides a monthly analysis and easy to review reporting to identify anomalies such as cramming or other subscription-based services your users may association with your account. Normally, the initial clean-up of an account more than justifies years of ARG’s service, so the service ends up costing the company money and gives you the assurance that there are not hidden fees bloating your bill.